Booking.com offers concession in bid to end competition probes

Reuters News
|
Posted: Dec 15, 2014 7:06 AM

By Foo Yun Chee

BRUSSELS (Reuters) - Online travel agent booking.com has offered to scrap a practice which prevents hotels from giving discounts to its rivals in a bid to end investigations by competition authorities in France, Sweden and Italy, the European Commission said on Monday.

Such so-called parity clauses in contracts between online booking sites and hotels are common in the industry and have led to complaints by competitors and scrutiny by regulators across Europe who are worried that they may dampen competition and hurt consumers.

The Commission, the antitrust enforcer in the 28-country European Union, said it was coordinating the national probes and that it was not conducting its own investigation. Third parties have until Jan. 31 to provide feedback on the concessions.

"Booking.com has proposed to abandon the parity requirement in respect of prices which the hotel makes available to other online travel agents," the Commission said in a statement.

It said however that booking.com, part of U.S. company Priceline Group Inc, could still have clauses in their agreements with hotels preventing them from offering discounts or lower rates on the hotels' own websites.

The concession by booking.com - if accepted by the three national regulators following the third-party feedback, or market test - would be valid across Europe.

The Commission said the three national watchdogs were also investigating similar clauses used by other online travel agents but did not provide details.

In France, where two-thirds of all online reservations are made via booking.com, the competition regulator said its investigation had been prompted by a consortium of hotelier federations. Roland Heguy, president of French hotel federation UMIH, said his organization would review booking.com's proposal.

Germany, Austria and Ireland are looking into similar practices. The UK's Competition and Markets Authority is also looking into the hotel online booking sector, after quashing a decision by its predecessor body earlier this year to accept concessions from booking.com, Expedia and the InterContinental Hotels Group.

(Reporting by Foo Yun Chee in Brussels and Hannah Murphy in Paris; Editing by Pravin Char)